British soft drinks maker Britvic has reported a 6.3% decline in adjusted revenue to £617.1 million (€714.6 million) in the first half of its financial year ended 31 March 2021.
Adjusted EBIT for the period decreased 15.4% to £60.1 million (down 20.6% on a reported basis), while adjusted EBIT margin decreased 110bps to 9.7%.
The company’s profit after tax declined by 14.7%, to £33.2 million, as pandemic restrictions impacted on-the-go consumption as well as the hospitality sector.
However, the company witnessed strong growth in its at-home channels, which resulted in market share gains across Great Britain and Brazil.
‘Challenging Circumstances’
Commenting on the company’s performance, Simon Litherland, chief executive officer of Britvic, commented, “In challenging circumstances, we have delivered a robust first-half performance, demonstrating the resilience and agility of our business.
“We have continued to win in the channels open to us and have gained share in our key growth markets of GB and Brazil. Our cash management has been particularly strong, and I am pleased to reinstate our interim dividend.”
Britvic GB saw retail sales value for the at-home channel increase by 6.2%, ahead of the soft drinks market (+1.6%), led by brands such as Robinsons, Pepsi MAX, 7UP and online grocery sales outpacing market growth.
In Brazil, the company witnessed its fourth consecutive year of revenue growth.
Litherland added, “We have also made good progress on our strategic opportunities, such as simplifying our Irish business, entering the mainstream energy category in GB and Ireland by relaunching Rockstar with PepsiCo, and acquiring Plenish, a leading natural premium brand in the fast-growing plant-based drinks category.”
‘Under-appreciated Beneficiary’
According to Russ Mould, investment director at AJ Bell, Britvic is an “under-appreciated beneficiary” of the easing of lockdown restrictions as soft drinks will benefit from the reopening boom.
Mould added, “Britvic owns a lot of popular brands, which has helped the business stay fairly resilient during the pandemic as families have flocked to stock shelves at home with names such as Robinsons squash.
“Although many of the leisure outlets selling its products have been shut on and off during the past year, Britvic has still been able to crack on with strategic developments. […] Under the circumstances, its ability to keep innovating and have a steady stream of product sales, albeit at reduced rates, has helped the business avoid any serious damage from the pandemic. Now it is well-positioned to benefit as the on-trade (pubs, restaurants, hotels) reopens.”
Outlook
In the second half, the company plans to rebuild investment behind its brands to ensure that it is well-positioned for recovery.
“As lockdown restrictions have started to ease in some of our markets, early trading has been encouraging. Although some uncertainty does remain, I am confident that our strategy and focus on People, Planet and Performance will ensure we deliver growth for all our stakeholders, both in the short and long term,” Litherland stated.
